South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.

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Friday, November 11, 2016

Ft LatAm Viva For November 11, 2016

The Mexican peso crumpled, the Cuban army began military maneuvers, Colombia’s “No” vote campaigners cheered, Peru’s president probably wished he had not joked about cutting ties with Washington if Donald Trump won, while the rest of the region congratulated the US president-elect through gritted teeth. “Here’s to @realDonaldTrump’s victory,” Evo Morales, the president of Bolivia, tweeted sarcastically. “We hope to work against racism, machismo and anti-immigration for the sovereignty of our peoples.” Brazil’s Foreign Ministry sent a curiously unsigned message, with bland bromides about “working together” and “new opportunities”.

Yes, it’s a brave new world in financial markets. The current view is that a Trump presidency likely means fiscal stimulus, thus stronger US growth in 2017, modestly higher inflation, perhaps higher energy prices, and higher interest rates. For Latin America, that is a mixed bag. Higher US interest rates and less outward-bound capital means weaker Latin American currencies: they have all fallen since US election night, although feverish Argentina bond-buying continues to buoy the peso. Higher oil prices, if they materialise, will help energy producers throughout Latin America - perhaps even in Venezuela, although probably not enough to stave off eventual default.

A Trump presidency also likely means more US protectionism – ironically just as South America is getting serious about trade liberalisation – although, again, it is Mexico that is in the firing line. Officials there are putting on a brave face for now on the possibility that Mr Trump will not do what he promised, namely build a wall, tear up Nafta and deport illegal immigrants.

They may find ready allies in the US corporate world. Cadillac’s president, Johan de Nysschen has already said General Motors will not yield to political pressure to relocate plants back to the US.What about US foreign policy, though? Mexico aside, the most obvious countries in the spotlight are Cuba, Colombia and Venezuela. In Cuba, Barack Obama’s policy of rapprochement has been carried out by executive order and so could easily be reversed or tweaked. In Colombia, Mr Trump, alongside No voters in the recent referendum, may view the FARC peace accord as a “bad deal”, although in putting “America First”, he is just as likely not to want to get involved in another country’s internal conflict. In Venezuela, although unilateral US action remains extremely unlikely, there may be stronger rhetoric from the White House about the multiple failings of Mr Maduro’s administration. (The Venezuelan government and the opposition held their second round of Vatican-mediated talks on Friday; hopes are not high of a breakthrough.)

All this, though, is only speculation as next to nothing is known about whom Mr Trump’s future advisers on Latin America might be.On a personal note, one of the most curious features about this extraordinary year has been to watch how much of South America has moved away from populist rule just as the US has seemingly moved towards to it. That contrast is true even of autocratic Nicaragua, where Daniel Ortega on Sunday“won” a third term alongside his wife, cementing what critics call a family dynasty. Such dynasties, of course, fed the disgust of so many US voters who were fed up with the Clinton and Bush families, which in turn helped propelled Mr Trump, “the change agent”, to a truly extraordinary win. Congratulations Mr Trump.

Quote of the week

“We have been looking at scenario planning. The view for us is that we’re a large-scale business, we have significant capital investments we have made into the plants. It’s important to note that we produce for the global stage not only for North America. We’re able to divert a lot of Mexican production to serve other global markets that require our vehicles. I think that we will be able to accommodate whatever new developments lie in store” - Johan de Nysschen, president of Cadillac, speaking after Donald Trump’s election victory about GM’s Mexico investments.

Jack's South America

I started my South American adventure in 1973 in Chile. I had the misfortune to arrive a couple of days before General Pinochet staged his military coup and took power from Salvador Allende. I found myself staying at the Sheraton Hotel in Santiago. As the coup unfolded all sorts of men in US Army officer's uniforms appeared. Even more sinister were men with elegant designer slacks, silk shirts, and Rolex President watches. I knew from my days in Vietnam that they were part of the CIA Phoenix Program team. These people had been responsible for political kidnappings and assassinations in Vietnam. I was asked what I was doing there and my military record checked with the Pentagon. I did not end up in the infamous soccer stadium where many people were executed including two Americans.

I went on to spend 2 years in Peru and Five years in Brasil where I lived through the awful days of the military dictatorships.

It all was not sadness and war. I met many wonderful people who had to survive under difficult circumstances. I came to love and admire them. South America always has a special place in my heart. My first wife was from Brasil and my dear wife Elena is from Buenos Aires.

About Me

When I was a very young man I had an incredible grandmother named Sarah Elizabeth Walters. She told me the following words: "Son don't let the grass grow under your feet." I took those words to heart and went out to see the world. My life has been ana adventure all over the world. I have lived on six of the seven continents. I have been lucky to live this long.